Coca Cola And Their Marketing Techniques

Coca Cola and their Marketing Techniques

THE COCA COLA COMPANY

TABLE OF CONTENTS:

Introduction

History of the coca cola company

Products produced

THE COCA COLA COMPANY REPORT

Market share

Marketing strategies of the coca cola company

Financial report of the company

Conclusion

References

1/12

Coca Cola and their Marketing Techniques

Introduction:

Company history

The Coca-Cola Company is one of the world’s largest food and beverage companies. The companies main office is located in Atlanta, Georgia, U.S.A. In 1884 a pharmacist named John Smith Pemberton invented a wine which he named the Pemberton French wine coca, he later developed a non alcoholic drink made from the coca leaves of south America which was flavored with kola nuts, hence the word coca cola, marking the start of the giant company we

Griggs Candler purchased a stake of the company in 1887 and the company was named the coca cola company. Benjamin Thomas and J. whitehead bought the exclusive rights of the company in 1899 who founded the Coca-Cola bottling company.

During the second world war the company sold soft drinks to US soldiers and as a result the company set up bottling plants in other regions, this led to the wide spread popularity of the drink all over the world which was as a result of US soldiers when they returned home from the war. In recent years due to increased competition the company has involved itself in ownership of franchises all over the world.

2/12

Coca Cola and their Marketing Techniques

Company products

The coca-cola company produces a wide range of products, including: soft drinks (Coke, Fanta, and Sprite), Mineral water (Dasani), non-carbonated beverages (PowerAde sports beverage, flavored tea Nestea). In general the Coca-Cola Company (TCCC) only produces syrup concentrate which is then sold to various bottlers throughout the world who hold a Coca-Cola franchise. Coca-Cola bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise the resulting Coca-Cola product to retail stores, vending machines, restaurants and food service distributors. The Coca-Cola Company offers nearly 400 brands in over 200 countries, besides its namesake Coca-Cola beverage. Diet Coke was introduced in 1982 to offer an alternative to dieters worried about the high number of calories present in Classic Coke. [2]

THE COCA COLA COMPANY REPORT

Market share:

According to a 2005 report the coca cola company sells over 400 brands to over 200 countries where it is estimated that over 50 billion beverages are consumed per day worldwide, the percentage consumption of its products sold in the US is 27%, 27% in Mexico, Japan, Brazil and china while the remaining 46% is sold to the rest of the world. The diagram below shows the percentage market share of the coca cola company across the world: [3]

3/12

Coca Cola and their Marketing Techniques

The company is the best-selling soft drink maker in many regions of the world. Nevertheless, there are some places like Quebec and Prince Edward Island, Canada, where Pepsi is the

market leader. In the                                                                                                                                                                          Mi

ddle East

, the only region in the world where Coca-Cola is not the number one soda drink, Coca-Cola nonetheless holds almost 25% market share. In

Peru

the native Inca Kola has been more popular than Coca-Cola. In Japan

the best selling soft drink is not cola, but canned tea and coffee. [4]

According to the company’s 2005 report the coca cola company sells over 400 brands to over 200 countries where it is estimated that over 50 billion beverages are consumed per day worldwide. This means that the company’s products are not limited to the U.S but are global.

Marketing strategies

In many types of businesses the selling costs are usually higher than production costs. Due to this fact the marketing strategies of each respective company are paramount. On its part the coca-cola company uses many strategies including Advertisements & campaigns ("The Zero Movement"). The Zero Movement is a campaign by Coke to sell a new sugar-free drink called "coca cola zero" in Australia. The campaign has involved marketing strategies like buying billboards and the backs of magazines for adverts apparently by "The Zero Movement", as well as putting up posters in public places.

4/12

Coca Cola and their Marketing Techniques

The company also uses sponsorships as a way of marketing itself in various activities in Americ

a and all over the world. These sponsors range from the fields of sports, education, institutional and many other fields.

The company also enters into mergers and joint ventures to market itself especially where it is not the market leader or there is stiff competition, e.g. in Peru, where the native Inca Kola has been more popular than Coca-Cola, which prompted Coca-Cola to enter in negotiations with the soft drink’s company and buy 50% of its stakes. In many places the company owns a stake in a local franchise just to have their brand name printed on the products.

Concerning this year’s Super bowl

In this year’s super bowl the company was returning after more than six years. This was the reason why it changed its marketing strategy compounded by the fact it was returning to the super bowl after a lengthy lawsuit, where it had been accused of treating some of its workers unfairly.

After an eight-year absence, Coca-Cola will return to the Super Bowl, not by advertising during the game itself, but by sponsoring the kickoff show, the final pre-game segment. Coke will

5/12

Coca Cola and their Marketing Techniques

promote its energy drink Full Throttle in two 15-second commercials and a 60-second commercial costing an estimated $13 million. Coke is also moving ahead full throttle when it comes to treating its employees more fairly: in contrast to the Super Bowl advertisers mentioned in this report thus far, Coca-Cola is an employer whose treatment of its employees has made it a true industry leader. It took a big-league lawsuit, however, to force Coke’s turnaround. Those watching this year’s Super Bowl can have a Coke and smile knowing that Coca-Cola has made significant strides in improving how its minority employees are treated: Coke’s efforts are the real thing. Coke’s progress demonstrates how lawsuits can play a significant role in motivating a real turnaround in corporate culture, as the company has now come from behind to take a large lead over some of its advertising competitors in treating its workers fairly. [5]

Financial report

In the first year of sales Pemberton sold drinks and earned 50 dollars, however the production cost of these drinks for that year was 70 dollars, however after Candler purchased the companies rights he aggressively marketed the products and the sales increased by over 4000% and therefore the drink become the most popular drink in America.

The company’s current financial folio has a net income in the range of U.S$ 5.080B [6]

It also has an operating income of around U.S$ 6.308B according to 2006 Statistics [7]

The company’s 3 year income rate (financial Plan) Revenue projections for the years2004-2006 were [8]

6/12

Coca Cola and their Marketing Techniques

Annual income report:

All amounts in millions of US Dollars

Year

Revenue

Gross Profit

Operating Income

Total Net Income

Diluted EPS (Net Income)

Dec  06

7/12

Coca Cola and their Marketing Techniques

24,088.0

15,924.0

6,308.0

5,080.0

2.16

Dec  05

23,104.0

14,909.0

6,085.0

4,872.0

2.04

8/12

Coca Cola and their Marketing Techniques

Dec  04

21,962.0

14,324.0

5,698.0

4,847.0

2.00

The coca-cola company is also boosted by the fact that it’s listed on both the New York stock exchange and the Dow Jones Industrial Average

[9]

Projections for the next 3 years will be released on17th April 2007.

Conclusion:

Although the company has been voted among the most successful companies in the world, the company has been criticized on many fronts including its perceived relationship with human rights violations and other perceived unethical practices [10] .

9/12

Coca Cola and their Marketing Techniques

In regards to its business practices, a number of law suits have issued in relation to its allegedly monopolistic and discriminatory practices, some of which have been dismissed, some of which The Coca-Cola Company agreed to change its business practices and some of which settled out of court. It has also been involved in a discrimination case. There have been continuing criticisms regarding the Coca-Cola Company’s relation to the Middle East and U.S. foreign policy

[11]

In regards to environmental issues in India, there has been a controversy over pesticides possibly showing up in the product, as well as the company’s over-use of local water supplies in some locations. Packagings used in Coca-Cola’s products have a significant environmental impact but the company strongly opposes attempts to introduce mechanisms such as container

References:

David Mercer (1998), Marketing Strategy, Sage Publishers, U.S

10/12

Coca Cola and their Marketing Techniques

The source watch (2007) the coca cola company, retrieved on 11th April available at www.sour cewatch.org

The official coca cola company website (2007) retrieved on 11th April available at www.thecoca colacompany.com

Wikipedia the free encyclopedia (2007) the coca cola company’s marketing strategies, retrieved on 11th April, available at www.wikipedia.com

[1] www.thecocacolacompany.com

[2] www.thecocacolacompany.com

[3] www.thecocacolacompany.com

[4] www.wikipedia.com

[5] www.workplacefairness.org/superbowl/coca-cola.php

[6] www.thecoca-colacompany.com/presscenter/pdfs/ko_earnings20070214.pdf

[7] www.thecoca-colacompany.com/presscenter/pdfs/ko_earnings20070214.pdf

[8] www.hoovers.com/coca-cola

[9] www.nyse.com/about/listed/lcddata.html?ticker=KO

11/12

Coca Cola and their Marketing Techniques

[10] www.wikipedia.org/wiki/Human_rights

[11] www.wikipedia.org/Criticism_of_Coca-Cola#Business_practices

[12] www.proxyinformation.com/cocacola/cokeres.html >

12/12